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ACCA · Question 60 · Interpretation of Financial Statements
Section B - Case 2: Single Entity Accounts
Scenario: AquaHarvest Marine Farms
AquaHarvest prepares its financial statements for the year ended 30 September 20X6.
Draft Revenue: $500,000
Draft Cost of Sales: $300,000
Draft Current Assets: $60,000
Draft Current Liabilities: $40,000
Calculate the draft Gross Profit Margin as a percentage. (Enter the number only, e.g., 40)
Section B - Case 2: Single Entity Accounts
Scenario: AquaHarvest Marine Farms
AquaHarvest prepares its financial statements for the year ended 30 September 20X6.
Draft Revenue: $500,000
Draft Cost of Sales: $300,000
Draft Current Assets: $60,000
Draft Current Liabilities: $40,000
Calculate the draft Gross Profit Margin as a percentage. (Enter the number only, e.g., 40)
How to approach this question
Gross Profit = Revenue - Cost of Sales. Gross Profit Margin = (Gross Profit / Revenue) × 100.
Full Answer
Gross Profit = Revenue ($500,000) - Cost of Sales ($300,000) = $200,000.
Gross Profit Margin = ($200,000 / $500,000) × 100 = 40%.
Common mistakes
Calculating mark-up (Gross Profit / Cost of Sales = 66.7%) instead of margin.
Practice the full ACCA FA — Financial Accounting Practice Exam 5
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